Dividing ending inventory by cost of goods sold and multiplying the result by 365 is equal to the:

Accounted for in current and future periods.

A premium on common stock:

Bonds that give the issuer an option of retiring them prior to the date of maturity are:

Treasury stock is classified as:

A company issued 60 shares of $100 par value stock for $7,000 cash. The total amount of paid-in capital in excess of par is:

The appropriate section in the statement of cash flows for reporting the cash payment of wages is:

The ability to meet short-term obligations and to generate revenues using the least amount of resources is called:

The Premium on Bonds Payable account is a(n):

Bonds that mature at different dates and end up with the total principal repaid gradually over a number of periods are referred to as:

When a bond sells at a premium:

A company has 40,000 shares of common stock outstanding. The stockholders' equity applicable to common shares is $470,000 and the par value per common share is $10. The book value per share is:

A company issued 7% preferred stock with a $100 par value. This means that:

The appropriate section in the statement of cash flows for reporting the issuance of common stock for cash is:

The indirect method for the preparation of the operating activities section of the statement of cash flows:

The direct method of reporting operating cash flows:

A machine with a cost of $130,000 and accumulated depreciation of $85,000 is sold for $50,000 cash. The amount that should be reported as a source of cash under cash flows from investing activities is:

Bonds owned by investors whose names and addresses are recorded by the issuing company and for which interest payments are made with checks to the bondholders, are called:

The appropriate section in the statement of cash flows for reporting the issuance of common stock for cash is:

Prior period adjustments are reported in the:

Activities that involve the production or purchase of merchandise and the sale of goods and services to customers, including expenditures related to administering the business, are classified as:

The indirect method for the preparation of the operating activities section of the statement of cash flows:

The purchase of long-term assets by issuing a note payable for the entire amount is reported on the statement of cash flows in the:

Accounting standards:

Financial statements with data for two or more successive accounting periods placed in columns side by side, sometimes with changes shown in dollar amounts and percents, are referred to as:

When preparing the operating section of the statement of cash flows using the indirect method, noncash operating expenses are added back to net income.

Information to prepare the statement of cash flows usually comes from (a) comparative balance sheets, (b) current income statement, and (c) additional information.

The type of bond that provides the greatest security from theft of loss is the debenture.

The full disclosure principle requires that noncash investing and financing activities be disclosed as part of the statement of cash flows.

The carrying value of a long-term note is computed as the present value of all remaining future payments, discounted using the market rate at the time of issuance.

A discount on bonds payable occurs when a company issues bonds at a price less than par value.

Interest payments on bonds are determined by multiplying the par value of the bond by the stated contract rate.

Changes in accounting estimates are accounted for in current and future periods.

Minimum legal capital requirements often prohibit dividends when the dividends reduce stockholders' equity below the minimum specified amount.

Operating leases are long-term or noncancelable leases in which the lessor transfers all the risks and rewards of ownership to the lessee.

The cash flow on total assets ratio can be used as an indicator of earnings quality.

The statement of cash flows explains how transactions and events impact the end-of-period cash balance to produce the end-of-period net income balance.

Extraordinary items are reported in the operating section of the income statement.

The direct method of preparing the statement of cash flows is usually viewed as user friendly since it requires less accounting knowledge to understand it.

The direct method of preparing the statement of cash flows is usually viewed as user friendly since it requires less accounting knowledge to understand it.

A lease is a contractual agreement between a lessor and a lessee that grants the lessee the right to use the asset for a period of time in return for cash payment(s) to the lessor.

The return on total assets can be calculated as the profit margin times the total asset turnover.

A premium on bonds payable occurs when bonds have a contract rate greater than the market rate at issuance.

Under IFRS, interest revenue may be classified as an operating or investing activity, assuming that this classification is applied consistently across all periods.

The price-earnings ratio reveals information about the stock market's expectations for a company's future growth in earnings, dividends, and economic opportunities.

The FASB recommends that the operating section of the statement of cash flows be reported using the direct method.

A cash equivalent must be readily convertible to a known amount of cash and must be sufficiently close to its maturity so its market value is unaffected by interest rate changes.

The direct method for preparing and reporting the statement of cash flows reports net income and then adjusts the necessary items to calculate net cash provided or used by operating activities.

Liquidity refers to the availability of resources to meet short-term cash requirements.

A high level of expected risk suggests a low price-earnings ratio.

The "cumulative effect of a change in accounting principles" is shown below the extraordinary items section on the income statement.

Both the direct and indirect methods yield the identical net cash flow amount provided or used by operating activities.

An installment note is an obligation to the issuing company that requires a series of periodic payments to the holder.

When preparing the operating section of the statement of cash flows using the indirect method, noncash operating expenses are added back to net income.

If a company's activities include operations that are being discontinued, the income or loss from the discontinued operations are included on the income statement as part of income from continuing operations.

The evaluation of company performance and financial condition includes evaluation of (1) past and current performance, (2) current financial position, and (3) future performance and risk.

Companies have the option of using either the direct or indirect method to prepare the operating section of the statement of cash flows.

Liquidity and efficiency are measures of a company's ability to meet short-term obligations.

The debt to equity ratio is calculated by dividing total liabilities by total assets.

Callable bonds have an option exercisable by the issuer to retire them at a stated dollar amount prior to maturity.

Ratios can be expressed as a percent, rate, or proportion.

A basic present value concept is that cash in the future is worth less than the same amount of cash today.

A basic present value concept is that cash received in the future is worth more value than the same amount of cash received today.

Trend analysis is a form of horizontal analysis that can reveal patterns in data across successive periods.

Cash flow information can assist internal users in planning day-to-day operating activities.

The statement of cash flows explains the difference between the beginning and ending balances of cash and cash equivalents.

Cash paid out for merchandise is considered to be an operating activity.

Both the direct and indirect methods yield the identical net cash flow amount provided or used by operating activities.

Horizontal analysis is used to reveal changes in the relative importance of each financial statement item.

Cash flow information can assist internal users in planning day-to-day operating activities.

The purchase of stock in another company is considered to be a financing activity.

An annuity is a series of equal payments made at equal time intervals.

A debit balance in retained earnings is often referred to as a retained earnings deficit.

When a company declares cash dividends, retained earnings is reduced.

A pension plan is a contractual agreement between an employer and its employees in which the employer provides benefits to employees after they retire.

Financial statement analysis can be used for personal investment decisions.

A noncash investing transaction should be disclosed as either a footnote or small schedule attached to the statement of cash flows.

Standards for comparison are necessary when making judgments about a company's financial performance.

To be classified as a cash equivalent, an investment must be readily convertible to an unknown amount of cash because the market value may be affected by interest rate changes.